(Bloomberg) -- Asian equities primed for early declines on Friday after Wall Street traders navigated falling stocks amid whipsawing tariff headlines.
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Shares in Australia fell over 1% at the open while equity index futures for Japan and Hong Kong slipped. Contracts for the Nikkei 225 were more than 2% lower, against the backdrop of declining risk sentiment and a stronger yen.
The S&P 500 slid 1.8% and the Nasdaq 100 sank 2.8%, with the tech-heavy gauge on the brink of a technical correction. US futures partly retraced the losses early Friday after Broadcom Inc. gave an upbeat revenue forecast. The chipmaker reassured investors that spending on artificial-intelligence computing remained ongoing, pushing its shares around 15% higher in after-market trading.
The post-hours rally spread to tech companies that were among the hardest hit on Thursday. Nvidia Corp. and Marvell Technology Inc., which plunged during the main session as its outlook disappointed investors, rose after the closing bell.
In a sign of fragile sentiment during regular trading on Thursday, US stocks failed to stage a rebound after a decision by President Donald Trump to delay levies on Mexican and Canadian goods covered by the North American trade deal. The seesawing outlook on tariffs added to the downbeat mood on Wall Street.
“Right now, trade policy is dominating market action,” said Chris Larkin at E*Trade from Morgan Stanley. “Until the tariff smoke clears, it could continue to be a bumpy ride for traders and investors.”
President Donald Trump exempted Mexican and Canadian goods covered by the North American trade agreement known as USMCA from his 25% tariffs until April 2. The move was the latest in a series of stop-start actions on levies aimed at the countries.
Later comments later from Treasury Secretary Scott Bessent all but confirmed tariffs will be coming. Bessent rejected the idea that tariff hikes will ignite a new wave of inflation, and suggested that the Federal Reserve ought to view them as having a one-time impact.
Treasuries rallied on the short end of the curve Thursday but were otherwise little changed. An index of the dollar fell for a fourth session, its longest losing streak since September. The Mexican peso and the Canadian dollar rose on news of the potential tariff reprieve. Australian and New Zealand yields fell early Friday.
In Asia, China’s central government has ample fiscal policy tools and space to respond to possible domestic and external challenges, Chinese Finance Minister Lan Fo’an said Thursday on the sidelines of the annual legislative session. The PBOC will implement a moderately loose monetary policy, Pan said, repeating an earlier pledge to cut interest rates and lower the reserve requirement ratio for lenders at “an appropriate time.”
Elsewhere in the region, data set for release includes inflation for Thailand and Taiwan and foreign reserves for China and Singapore.
Upcoming nonfarm payrolls data on Friday may help traders identify the path ahead for interest rates, as they grapple with the impact of rocky geopolitics, the impact of tariffs on global growth and the outlook for inflation.
Friday’s report from the Bureau of Labor Statistics will provide an update for Fed officials about momentum in the labor market that’s been the key support — at least until January — of household spending and the economy.
Fed Chair Jerome Powell is slated to speak at a monetary policy forum Friday afternoon. Policymakers next meet March 18-19 and they’re expected to hold interest rates steady as they gauge the labor market and inflation trends as well as recent government policy shifts.
Meanwhile, Fed Reserve Governor Christopher Waller said he wouldn’t support lowering interest rates in March, but sees room to cut two, or possibly three, times this year.
“If the labor market, everything, seems to be holding, then you can just kind of keep an eye on inflation,” Waller said Thursday at the Wall Street Journal CFO Network Summit. “If you think it’s moving back towards target, you can start lowering rates. I wouldn’t say at the next meeting, but could certainly see going forward.”
In commodities, oil eked out a marginal gain Thursday with West Texas Intermediate futures settling little changed above $66 a barrel, snapping a four-day straight losing streak by a hair. Bitcoin traded above $90,000.
Key events this week:
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Eurozone GDP, Friday
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US jobs report, Friday
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Fed Chair Jerome Powell gives keynote speech at an event in New York hosted by University of Chicago Booth School of Business, Friday
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Fed’s John Williams, Michelle Bowman and Adriana Kugler speak, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.3% as of 8:25 a.m. Tokyo time
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Hang Seng futures fell 1.3%
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Australia’s S&P/ASX 200 fell 1.1%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.0796
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The Japanese yen was little changed at 148.01 per dollar
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The offshore yuan was little changed at 7.2435 per dollar
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The Australian dollar was little changed at $0.6337
Cryptocurrencies
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Bitcoin rose 0.8% to $90,555.89
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Ether was little changed at $2,212.95
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
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